22 Jul 2010
New Zealand’s pine plantations continue to produce a river of gold in China for their mainly foreign owners, with record earnings so far this year. But the competition just got a whole lot tougher.
A new trade agreement between the Chinese and Canadian governments throws the door wide open to softwood logs from the vast forests of British Columbia – and with one major advantage over New Zealand.
From the beginning of July, B.C. logs can be shipped into China through the ports of Putian (Fujian province) and Taicang (near Shanghai) all-year-round, without being treated for pests, according to the Vancouver Sun.
Inwood today sources say this is double-whammy bad news. Canadian log exporters will be able to compete strongly with, and maybe even displace, New Zealand radiata pine. Lowering the market price to import parity based on the Canadian supply points is a distinct possibility.
But the biggest millstone around the Kiwi neck is the added costs of compliance with strict phytosanitary requirements for exporting forest products from NZ to China. Given the backdoor deal done by the Canadians, this perfectly sensible border protection procedure has been turned into a non-tariff barrier – and a trade-threatening one at that.
To date, China would only accept untreated B.C. logs (mostly low-grade hemlock, similar to radiata pine) during the winter months. But the industry is now expecting a fresh spurt of logging in the province's economically hard-hit northwest coast.
A Canadian forest industry consultant told the Sun “Chinese sawmillers are discovering the advantages of B.C. hemlock over both Russian red pine and New Zealand radiata pine. It is stronger and it absorbs stains and preservatives better”.
A surplus of trans-Pacific shipping in favour of Canadian exporters is another reason for New Zealand’s commodity-driven wood trade to be concerned about the immediate future in China.
